Proposed Settlement Would Provide $300K to Each Victim of Sex Abuse by Clergy

By Andrew G. Simpson | June 30, 2022

Insurers and the Roman Catholic Diocese of Rochester have agreed on a schedule for discovery and a bankruptcy court trial regarding a proposed $147 million settlement to cover sex abuse claims against the church. The proposed settlement was reached after years of mediation.

The schedule points to a settlement hearing beginning January 24, 2023. The hearing could run through January 27.Between now and January, the parties will have time to conduct fact discovery and interview expert witnesses.

The settlement includes $107,750,000 from insurers and $40,500,000 from the Catholic diocese and its entities. The settling insurers include London Market Insurers ($16.6 million), certain Underwriters at Lloyd’s ($1.1 million), Interstate Fire & Casualty Co. and National Surety Corp. ($26 million), and Continental Insurance Co. (CNA) and its affiliates ($63.5 million). The liability insurance policies affected were purchased starting in 1943.

The settlement offer would allow for an average recovery of more than $300,000 per survivor claim, according to the filing by the church.

Lawyers for the victims of sexual abuse have criticized the proposal as a deal that shortchanges the victims. Jeff Anderson & Associates, a law firm that represents survivors of clergy abuse, claimed that the diocese likely has more than $4 billion in insurance and that the diocese’s own contribution to the settlement amount is “only a fraction of what they are able to pay survivors.”

The proposal is before Judge Paul Warren of the U.S. Bankruptcy Court for the Western District of New York, where the diocese filed for Chapter 11 protection in 2019 after the New York State Legislature passed the Child Victims Act, which modified the statute of limitations and created what was initially a one-year “window” during which victims of child sex abuse could commence previously time-barred civil actions.

According to the diocese, approximately 471 claims were received by the deadline of August 13, 2020. It said it filed for bankruptcy in order to reorganize its finances to deal with the claims it faced.

Parties had until June 23 to submit briefs on the proposed settlement. Their views expressed the the briefs are subject to change after the discovery process and trial are complete.

CNA is one of the insurers that submitted a brief. It calls the $63,500,000 it is being asked to pay “fair and reasonable” in part because it believes many claims under its policy do not involve facts sufficient to impose liability upon the diocese, are subject to complete coverage defenses, or would have only limited coverage available once the limits of liability are applied.

Based on its investigation to date, CNA said it has concluded that there are, at most, 321 timely claims alleging abuse during an alleged CNA policy period — and probably fewer. The insurer thinks liability is uncertain for a significant portion of those claims and said it intends to file objections to about 75 claims for various reasons.

Before deciding to settle with insurers, the diocese said it considered litigation but ultimately “determined that the interests of survivors in this case would be best served by achieving certainty with respect to a very substantial insurance contribution rather than risking the cost, extensive delay, and uncertain outcome of litigation in pursuit of the theoretical possibility of a larger recovery at some point in the distant future.”

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